Where angels fear to tread: traps for innocent public servants

Impressions and appearances matter in politics. They are often as important as the facts, particularly in the making of history.

At times they are even more important. Not least when conflict of interest allegations arise, as they so often do, as signal moments defining whether prime ministers are fair dinkum about integrity in politics and public administration.

Senator Fiona Nash is sworn in as Assistant minister for Health at Government House in Canberra. Her former chief of staff Alastair Furnival - who resigned on Friday - has links with the Santo Santoro faction in the Liberal party. Photo: Andrew Meares

Tony Abbott ought be grateful that his first big problem in this area involved straight-forward principles, over players who probably do not matter very much. On appearance at least, the case showed a person, a mere staffer, with obvious conflicts, who had to go. The apparent conflict did cause political damage, but hardly the sort of humiliation that occurs when a minister must go.

A failure to draw the line in cases such as Alastair Furnival, or some rationalisation excusing his actions and omissions, would damage Abbott as much as Howard's prevarication and initial inaction did to him in his first term of government from 1996.

But if Abbott has any concern for appearances, he ought to look also at the impression that now exists that the ''victim'' of the staffer's apparent conflict of interest has suffered by standing up for the public interest. That impression may be wrong - there is often a gap between appearances and realities. The system, by ''reorganising'' her role to reduce contact with the minder may have, in fact, protected her against minder abuse and abuse of power. But an ordinary public servant watching from afar will probably draw the lesson that one should never stand up to a minder or a minister.

Public servants are these days much constrained about expressing concern about what has occurred. It's one reason why we have fearless and frank senior officers - such as the head of Prime Minister and Cabinet, the supposed head of the service, and Steve Sedgwick, of the Public Service Commission - to speak to protect the interests of sound administration. Their silence is deafening.

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A newish junior minister - Fiona Nash - had as her chief of staff a former lobbyist, Alastair Furnival, whose wife (Tracey Cain) is still a lobbyist cum spin-doctor. Furnival, who resigned on Friday afternoon, has links with the Santo Santoro faction in the Liberal Party - one of a number of party cancers as severe as anything in Labor.

Furnival has said he had severed his business links. But he remains a director of the private company with which his wife carries out her living, which includes promoting the interests of clients in the junk food industry. These are affected by decisions in Nash's portfolio, including ones where Furnival took a loud and strong role. Also affected were interests for which he used to work.

When the pecuniary interest is uncovered (not volunteered), he says his present activities in the family company had been entirely passive. Cain insists that she has not lobbied the minister, her husband, or the department since the election.

Furnival seems to have failed to notice for a few days a departmental notification that a public website, with advice about the relative junkiness of various foods, has gone on line. (The decision to establish the website was not, strictly, just a Commonwealth matter: it arose from Commonwealth-state ministerial council activity, which has long been bossy and nanny-statish about food and preventive health.)

Had the staffer noticed, he could probably have discussed it with the minister before it went online. His zeal afterwards may have come from a feeling he had let something slip, and let his minister down. But suddenly he called the relevant officer in the department, haranguing her and ordering the site to be taken down. It might have been a big issue because he and his minister shared a general distaste for bossy nanny-statishness. Or it could be because the soft propaganda in the site was contrary to the interests of the junk food industry, including his wife's clients. Which it was does not matter, because the potential for conflict was very real.

The minister, whose involvement was in arrears, has been loyal since, adopting his view and an entirely unconvincing explanation of why putting up the website had been premature. The minder's style was such that departmental administrators decided that the officer should not have to put up with him on matters dealing with the secretariat.

Higher-priced help - her deputy secretary - will now be at the receiving end of his views and/or statements of the minister's wishes on secretariat matters. She remains the Commonwealth's chief adviser to the minister in this area.

Departmental people insist that there is no question of the officer's being punished, or stripped of responsibilities. They say that the mixed responsibilities - to her minister and to the council of federal and state ministers - could confuse people about who she was speaking for at any particular time. But the idea that she was not victimised is not necessarily the impression created.

By week's end, she seemed the victim - publicly losing responsibilities and functions, and, as such, power and status. Like her Secretary Jane Halton, forever unfairly doomed to be associated with babies thrown overboard, her fate may be to be remembered as the person thrown overboard in the Furnival affair.

Here's where we come back to the importance of impressions. Perhaps she was supported and protected, not punished. But any public servant watching from afar could be excused for deducing that here was an object lesson in never arguing with a minder, lest one be ''reorganised'' into some less important function.

In a party where disdain for nanny-statism is endemic, Nash probably did not need to be nudged against a public health campaign by her chief of staff, conflicted or not. Nor need her chief of staff to have been conscious of his conflicts, or consciously acting to serve his wife's interests, if he expressed a feeling that this was the sort of thing government should not be bothering with. But that does not mean that he is not conflicted. He is. If a literal or adventurous reading of the latest weakened (not strengthened) code of conduct suggests otherwise, it is wrong, and ought to be tightened up.

Few people - indeed very few judges - really understand the conflict of interest. I have seen any amount of bad advice or bad example being given on the subject by people from chief justices, prime ministers, secretaries of PM&C down. If they do not understand the idea, and the principles, and are not themselves beyond conflicted situations, it is hardly surprising that minders have no real idea either.

The issue usually arises when there is some instant case in mind. The person accused is already in the spotlight and side-taking is instinctive, even before recourse to fact or principle. The accused will examine his or her conscience, and decide (with complete impartiality of course) that there is no conflict, and that no fair-minded or objective observer, knowing the facts, would think for a second that there was. In many of the cases I have seen, only the person's mother would not see a substantial appearance of conflict. Ten times as pronounced when, as is so often the case, the possible conflict has not been volunteered straight up. It is far from uncommon for this self-serving ''finding'' to be made with an indignant face and a belligerent approach to whoever raised the issue. The very fact some advocates, lobbyists or others fear retaliation, indeed, sometimes makes them reluctant to raise the question.

A judge, or a prime minister, or a minister, or a political staffer is only very rarely a good judge of his or her own situation. (That's why we have rules, objective tests, and registers of interests.) They are invariably very poor judges of what the notional ''man in the street'', ''reasonable'' person, or ''fair-minded observer'' might think. Thanks to the frequency of blatant and unpunished conflicts, the fair-minded observer has these days become very cynical about the capacity of people to forget their interests, or the importance of decisions being seen to be disinterested.

In 1980 Garfield Barwick, as chief justice, was accused of being in a conflict of interest - perhaps an impeachable one - because he had sat on cases involving the fortunes of companies in which his son had shares. Indeed, the appearance of conflict was the greater, because the shares were held in the name of a family company of which Barwick was a director, if, as he insisted, only as a trustee for his son.

Barwick publicly examined his conscience, complete with misleading references to the (still sound) Bowen committee report on private duty and public interest, and ruled that he was in no conflict, real or apparent. His apparent interest was not pecuniary, he said, because it was in trust for another. Had it been for him he conceded (n.b., Mr Furnival) it would have been disqualifying. No fair-minded or reasonable observer would suspect that the shareholdings would have had the slightest effect on his judgment in the case, he declared.

Geoff Sawer, doyen constitutional lawyer, ventured to doubt Barwick had the right test, in law or principle. ''The standard of judgment for deciding whether a judge is disqualified for interest should be that of the suspicious, unreasonable, or even malevolent disappointed litigant,'' he wrote. ''A disappointed litigant is never either reasonable or fair-minded, any more than the Labor Party is likely to be reasonable or fair-minded in relation to Sir Garfield after the events of November 1975.''

The Bowen committee (chaired by Sir Nigel Bowen, a former Liberal minister then judge, called upon to write rules for avoiding conflicts of interest for ministers and public servants) thought that the interests of spouses should be regarded as disqualifying, without any stop at the station asking what an outsider might think.

Sawer agreed: ''Family interests ought to disqualify since, on my personal experience and observation, a person will readily do things on behalf of children which that person would never dream of doing for himself. George Bernard Shaw observed that a woman with babies has no conscience, it's all run to milk, and this is convertible for the case of fathers.''

The principle is as good now as ever. These days, many spouses have active business careers and interests, as well as ''rights to privacy''. So, it is said, it cannot be assumed that a spouse knows or has a right to know what interests the other has.

Rubbish, but, so far as it is true, public suspicions should be allayed by frank public declaration, even by spouses. Work in politics (or on the bench) is not compulsory, but carried out by (well paid) volunteers. Those who volunteer for it (and members of their families) must accept that an inevitable cost is to some privacy and some free range of activity.

Who, in any event, would like the ultimate arbiter of such matters to be people capable of rationalising the use of public money to attend private functions?